Historic cuts in Pakistan car prices a ‘marketing stunt’ amid slow demand — experts

In this file photo, taken on June 18, 2016, a customer speaks with salespeople at a car dealership in Rawalpindi. (REUTERS/File)
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Updated 10 May 2024
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Historic cuts in Pakistan car prices a ‘marketing stunt’ amid slow demand — experts

  • Lucky Motor Company, which assembles KIA cars in Pakistan, and Pak Suzuki Motors recently reduced Stonic, Swift prices by up to Rs1.5 million
  • Experts say the automakers wanted to “test” the market through the stunt and the benefit would not end customers as it was opened for few days

KARACHI: The recent historic cuts in prices of multiple car models were a “marketing stunt” by automakers in Pakistan, experts and dealers said on Friday, attributing it to slow demand in the South Asian country.
Lucky Motor Company, which assembles KIA cars in Pakistan, reduced the price of KIA Stonic by as much as Rs1,500,000, followed by a cut in Swift price by up to Rs710,000.
The rate cuts by Kia and Pak Suzuki Motors came on the heels of a reduction in prices of Toyota Yaris by Rs133,000 and Honda City by Rs140,000 respectively in March.
While KIA and Pak Suzuki Motors have said they received an “overwhelming” to the price drops, experts believe it to be a marketing stunt to help struggling models fare better in the Pakistani market.
“They (LMC) played a game because they had about 300-350 (KIA Stonic) cars lying dead which were not sold,” Hajji Muhammad Shahzad, chairman of All Pakistan Motor Dealers Association (APMDA), told Arab News.
“They threw [them] in the market and stopped the booking.”
Shahzad said the price cut by the LMC generated interest among investors who booked the car instead of “genuine buyers,” noting that the car would come with around Rs500,000 own money as well.
Mashood Ali Khan, an auto industry expert, believed that price plays a key role in the auto sector, because of the current economic situation and prevailing high inflation. He said the LMC wanted to “test” the market.
“The people who have booked, maybe I am wrong, but I think they are mostly the investors,” Khan told Arab News. “It could not reach the end consumers as it was opened for two days.”
Reached for comment, LMC Chief Executive Officer Muhammad Faisal said they corrected the KIA Stonic price to help it compete with sedan cars available in Pakistan and “took the hit” themselves, though the automaker didn’t anticipate the overwhelming response to the price cut.
“We tried to bring it to the price point at which competing sedans are available,” Faisal told Arab News. “When we brought it to this price point, the response from the market was unbelievable and better than our expectations.”
Though a Pak Suzuki Motor official did not respond to Arab News query about the cut in Swift price, the company said in a circular it had received an “overwhelming” response and was now introducing “stylish combinations” of a two-tone exterior.
Shahzad, however, said Swift did not get a “good response” despite the price cut. 
A decrease in car prices was already expected as the Pakistani government notified in March it would charge 25 percent sales tax on locally assembled cars, if their invoice price exceeded Rs4 million.
Car sales declined in Pakistan by 38 percent during nine months of the current fiscal year, which began on July 1, amid a declining trend in auto financing, historic high interest rate, soaring prices and shrinking purchasing power of consumers, according to a research report by the Karachi-based Darson Securities.
Asked about the delivery of vehicles to customers, LMC CEO Faisal said the company had not delivered the newly booked Stonic cars and was still filtering buyers.
“We have just made a commitment that we will deliver it now,” he told Arab News. “We have ensured that we will book one car per CNIC (computerized national identity card), we are filtering the investors, we are giving preference to genuine customers, so that we can deliver it soon.”
Faisal said the automaker was evaluating its stock position after the current response and it would resume bookings, however, the company would be giving delivery commitments for October onwards.
Car prices have increased in Pakistan by around 40 percent in the last two years and the costs of vehicles remain high despite the recent cuts, according to car dealers.
Khan, the auto sector expert, called for localization of auto parts and a 10-year policy to promote auto industrialization to make affordable cars in Pakistan.


At least 11 Pakistan coalminers suffocate in gas build-up, official says

Updated 03 June 2024
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At least 11 Pakistan coalminers suffocate in gas build-up, official says

  • Balochistan chief mine inspector Abdul Ghani Kakar said the miners died in the Sanjdi coalfield, about 60km from Quetta
  • The miners were working about 1,500 feet under the ground and rescue teams retrieved their bodies after hours of work

QUETTA: At least 11 coalminers suffocated to death in a build-up of methane gas in a mine outside the southwestern Pakistani city of Quetta on Monday, a government official said.
The miners died in the Sanjdi coalfield, about 60 km (40 miles) from Quetta, according to Abdul Ghani Kakar, the chief inspector of mines for the provincial Balochistan government.
“Methane gas accumulated which caused the deaths,” he said.
The miners were working about 1,500 feet (450 meters) underground and rescue teams retrieved their bodies after hours of work, he added.
The chief inspector said an inquiry has been ordered to work out the cause of the incident, and to see whether there was any negligence.


‘No grounds’: EU says status of PIA flight ban unchanged

Updated 03 June 2024
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‘No grounds’: EU says status of PIA flight ban unchanged

  • The ban was instituted after a pilot license scandal following a 2020 PIA plane crash that killed nearly 100 people
  • Development comes weeks after PIA CEO said the airline would resume its flights to Europe in June or July this year

KARACHI: The European Union has maintained its ban on the Pakistan International Airlines (PIA) from operating flights to Europe, the European Commission said in a document seen by Arab News, citing “no grounds” to amend a list of countries barred from operating flights to the bloc.
PIA flights to Europe and the UK have been suspended since 2020 after the European Union Aviation Safety Agency (EASA) revoked the national flag carrier’s authorization to fly to the bloc following a pilot license scandal that rocked the country.
The issue, which followed a plane crash in May 2020 that killed nearly a hundred people, had resulted in the grounding of 262 of Pakistan’s 860 pilots, including 141 of PIA’s 434.
“The Commission considers that at this time there are no grounds for amending the list of air carriers, which are subject to an operating ban within the Union with respect to air carriers certified in Pakistan,” read the document released by the European Commission last week.
The document said the status of Pakistani air carriers will remain unchanged, in contrast with PIA CEO Muhammad Amir Hayat’s statement last month in which he expressed confidence that the PIA would resume flights to Europe, including two weekly flights to Paris, in June or July.
EASA and the Pakistan Civil Aviation Authority (PCAA) did not respond to Arab News’ requests for comment.
The document, which pointed to a “noticeable lack of depth of scrutiny” observed by EU experts, did not specify when EASA would conduct its next assessment or if there would be any further on-ground evaluations in Pakistan.
The commission said that EU experts conducted an on-site assessment in Pakistan on November 27-30, 2023.
“It was found that PCAA has an established policy to adhere to international safety standards, and is staffed by technically skilled and professional persons,” the document stated. “Nevertheless, common shortcomings were observed throughout the organization, such as underscoring of non-conformities, and the lack of internal verifications.”
It said Pakistan’s Flight Standards Directorate was “severely understaffed” in terms of sufficiently qualified personnel to perform all certification and safety oversight tasks.
“This situation is aggravated by the assignment of tasks that do not necessarily fall within the Flight Standards remit,” it added.
On the basis of the on-site assessment, the commission said it invited the PCAA to a hearing before the EU Air Safety Committee on May 14.
“At the hearing, PCAA, on the basis of a Corrective Action Plan (‘CAP’) submitted on 6 May 2024, addressed each observation described in the EU visit report, noting the root cause analysis underpinning all corrective measures taken or planned in the short, medium and long term,” it read.
The PCAA indicated the efforts undertaken to rectify the quality management shortcomings identified during the visit, according to the document.
“The Commission also highlighted the need for the government’s continued support, as well as the importance of ensuring leadership stability within the authority as a cornerstone for a well-functioning PCAA,” it stated, adding that EU member states should continue to verify effective compliance of air carriers certified in Pakistan with relevant international safety standards by prioritizing ramp inspections of those carriers.
Pakistan is set to privatize the national airline, which has been facing a financial crisis for the last several years, by June and July as part of the requirements set by the International Monetary Fund (IMF).
On Monday, Privatization Minister Abdul Aleem Khan said Pakistan had selected six companies qualified to bid to buy the PIA. The companies included Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol (Pvt) Consortiums, and YB Holdings Consortiums.


Pakistan selects six companies to bid for national carrier, says minister

Updated 03 June 2024
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Pakistan selects six companies to bid for national carrier, says minister

  • Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol Consortiums, and YB Holdings Consortiums emerged as finalists
  • Pakistan has previously said it was putting on the block a stake of between 51% and 100% in the loss-making airline as part of IMF reforms

ISLAMABAD: Pakistan on Monday selected six companies qualified to bid to buy national carrier Pakistan International Airlines, privatisation minister said.

The announcement came a couple of weeks after Pakistan had extended the date for submitting expressions of interest. A total of eight companies and consortiums had expressed an interest.

Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol (Pvt) Consortiums, and YB Holdings Consortiums emerged as the finalists, said a statement from the office of the minister, Abdul Aleem Khan.

"The pre-qualified companies can take part in the bids for the PIA," Khan said.

Pakistan's government has previously said it was putting on the block a stake of between 51% and 100% in the loss-making airline as part of reforms urged by the International Monetary Fund (IMF).

The disposal of the flag carrier is a step that past elected governments have steered away from as it is likely to be highly unpopular.

The privatisation of loss-making state-owned enterprises has been one of the top agenda items in recent talks between cash-strapped Pakistan and the IMF.

Islamabad has said it will privatise all state-owned enterprises, with the exception of strategic entities.


Pakistani Christian attacked by blasphemy mob dies of injuries

Updated 03 June 2024
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Pakistani Christian attacked by blasphemy mob dies of injuries

  • Nazir Masih, 72, suffered severe head injuries during the May 25 violence and was taken to hospital
  • He died despite twice undergoing surgery and was buried in the city of Sargodha amid tight security

LAHORE: A Pakistani Christian accused of blasphemy and attacked by a mob last month died of his injuries on Monday, a police official said.
Police in eastern Punjab province arrested more than 100 Muslim men and charged them under anti-terrorism laws for attacking a Christian father and son over allegations they desecrated pages of Islam’s holy book.
Nazir Masih, 72, suffered severe head injuries during the May 25 violence and was taken to a Rawalpindi hospital.
He died despite twice undergoing surgery and was buried in the city of Sargodha amid tight security, said district police officer Assad Ijaz Malhi.
Videos from Sargodha showed Christians carrying Masih’s coffin through the street. They shouted “Praise to Jesus” and “Jesus is great.” The casket was draped in black cloth and bore a small crucifix.
Malhi said police have registered cases against 500 people for attacking Masih’s home.
The mob went on the rampage after locals said they saw burnt pages of the Qur’an outside the house and accused Masih’s son of being behind it.
The violence brought back memories of one of the worst attacks on Pakistani Christians in 2023, when thousands of people set ablaze churches and homes of Christians in Jaranwala, also in Punjab.
Muslim residents at the time also claimed they saw two men desecrating the Qur’an.
Blasphemy accusations are common in Pakistan and under the country’s blasphemy laws, anyone found guilty of insulting Islam or Islamic figures can be sentenced to death.
While no one has been executed on such charges, just an accusation can cause riots and incite mobs to violence, lynchings and killings.


Pakistan Hajj Mission ensures hygienic food supply to pilgrims through regular inspections

Updated 03 June 2024
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Pakistan Hajj Mission ensures hygienic food supply to pilgrims through regular inspections

  • Hajj Director Faheem Afridi says a total of 13 penalties have been imposed on eight catering firms to improve their service
  • Pakistan has hired nine catering companies to fulfil demand of food for approximately 70,105 pilgrims under government scheme

ISLAMABAD: The Pakistan Hajj Mission (PHM) has been conducting regular inspections of kitchens run by catering companies to ensure a hygienic food supply to pilgrims arriving in the Kingdom to perform the annual Hajj pilgrimage under the government’s scheme, Pakistani state media reported on Monday.
Hajj is one of the five pillars of Islam and requires every adult Muslim to undertake the journey to the holy Islamic sites in Makkah at least once in their lifetime if they are financially and physically able.
Pakistan has a Hajj quota of 179,210 pilgrims this year, of which around 70,000 people will perform the pilgrimage under the government scheme, while the rest will use private tour operators.
“Determined to maintain quality and hygiene, the PHM is conducting regular and periodic inspections of catering companies’ kitchens,” the state-run APP news agency reported.
A total of nine catering companies were hired to meet the demand of food for approximately 70,105 pilgrims, out of which more than 52,691 have so far arrived in Saudi Arabia via 205 flights since May 9, according to the report.
On Monday, Pakistan Hajj Mission Director in Makkah Faheem Afridi visited kitchens and stores of one of these nine catering companies responsible for preparing breakfast for Pakistani pilgrims.
Afridi said the Hajj mission was implementing an “effective mechanism to ensure food quality, with continuous oversight during food preparation and round-the-clock monitoring of kitchens by Pakistani food coordinators.”
The quality and quantity of food are rechecked when delivered to residential buildings and hotels where the pilgrims have been staying, according to the report. The daily menu includes Pakistani and continental cuisines, which are served thrice a day during flexible timings to avoid any kind of rush.
The PHM director said the mission had imposed penalties on catering firms that failed to ensure the quality of food.
“There have been a total of 13 penalties imposed on eight catering companies so far, most of which were aimed at improving food quality,” he said.
“If any complaints are received regarding meals through the Pak Hajj mobile app or helpline, the catering company is investigated and immediate action is taken.”
The Pakistani religious affairs ministry formed a balanced food menu keeping in view its experience of previous years, according to the official. The food includes meat, lentils, vegetables, rice, two types of bread, yoghurt, fruit, sweets, tea and water.
The Hajj director said Saudi authorities also ensured food quality and hygiene standards for catering companies, requesting pilgrims to cooperate with catering staff and ensure discipline.
On the other hand, a 400-member dedicated Pakistan Hajj Medical Mission (PHMM) is also working around the clock to serve Pakistani pilgrims in Saudi Arabia.
Pakistan has established two hospitals and 11 dispensaries in the Saudi cities of Makkah, Madinah and Jeddah to provide health care to Hajj pilgrims.
This year’s pilgrimage is expected to run from June 14 to June 19. Pakistan’s pre-Hajj flight operation, which began on May 9, will continue until June 9.